Gap Inc. is splitting into two.
The retailer said Thursday that it's creating two independent publicly traded companies — low-priced Old Navy and a yet-to-be named company, which will consist of the iconic Gap brand, Athleta, Banana Republic, Intermix and Hill City.
The San Francisco-based company said the spin-off will enable each company to focus on flexibility and pare down costs.
The company also said that it will be shuttering 230 Gap brand stores over the next two years.
Gap's stock surged 24 percent in after-market trading.
The split up, which followed a comprehensive board review, come as Old Navy has been thriving, while Gap and Banana Republic have struggled.
"It's clear that Old Navy's business model and customers have increasingly diverged from our specialty brands over time, and each company now requires a different strategy to thrive moving forward," said Robert Fisher, Gap Inc.'s chairman.
Gap's current CEO, Art Peck, will hold the same position at the new company after the separation. Sonia Syngal, current CEO of Old Navy, will continue to lead the brand as a stand-alone company, which has about $8 billion in annual revenue. The new company that Peck will run has about $9 billion in annual revenue.
Upon separation, Gap Inc. shareholders are expected to receive a pro-rata stock distribution and as a result own shares in both the new company and Old Navy in equal proportion. The deal is expected to close in 2020.
The new company will be based in Gap Inc.'s current headquarters and Old Navy will remain at its current headquarters, both located in San Francisco.
Gap's shares rose $6.21 to $31.61 in extended trading after the split-up was announced.
WASHINGTON (AP) — The U.S. military said Monday that it attacked three boats accused of smuggling drugs in the eastern Pacific Ocean, killing a total of eight people as scrutiny over the boat strikes is intensifying in Congress.
The military said in a statement on social media that the strikes targeted “designated terrorist organizations,” killing three people in the first vessel, two in the second boat and three in the third boat. It didn't provide evidence of their alleged drug trafficking but posted a video of a boat moving through water before exploding.
President Donald Trump has justified the attacks as a necessary escalation to stem the flow of drugs into the United States and asserted the U.S. is engaged in an “armed conflict” with drug cartels. But the Trump administration is facing increasing scrutiny from lawmakers over the boat strike campaign, which has killed at least 95 people in 25 known strikes since early September, including a follow-up strike that killed two survivors clinging to the wreckage of a boat after the first hit.
The latest boat strikes come on the eve of briefings on Capitol Hill for all members of Congress as questions mount over the Trump administration’s military campaign.
Defense Secretary Pete Hegseth, Secretary of State Marco Rubio and other top national security officials are expected to provide closed-door briefings for lawmakers in the House and Senate.
The campaign has ramped up pressure on Venezuelan President Nicolás Maduro, who has been charged with narcoterrorism in the U.S. In a sharp escalation last week, U.S. forces seized a sanctioned oil tanker that the Trump administration has accused of smuggling illicit crude. Maduro has insisted the real purpose of the U.S. military operations is to force him from office.
The U.S. military has built up its largest presence in the region in decades and launched a series of deadly strikes on alleged drug-smuggling boats in the Caribbean Sea and eastern Pacific Ocean. Trump says land attacks are coming soon but has not offered any details on location.
Defense Secretary Pete Hegseth speaks during a Mexican Border Defense Medal presentation in the Oval Office of the White House, Monday, Dec. 15, 2025, in Washington. (AP Photo/Alex Brandon)
